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INDUSTRIAL PRODUCTION
AND CAPACITY UTILIZATION
Industrial production rose 0.5 percent in October after a downward revised gain of 0.5 percent in September. The output of consumer goods, business equipment, and durable materials registered solid gains. The output of energy materials, which had increased sharply in September, was little changed in October, as was the production of construction supplies. At 122.7 percent of its 1992 average, industrial production in October was 5.6 percent higher than in October 1996. The rate of industrial capacity utilization rose to 84.3 percent–its highest rate since March 1995.
Market Groups
The output of consumer goods rose 0.7 percent after only a slight gain in September. Durable consumer goods rebounded from September's drop as most major sectors posted gains. The pickup in the growth of output of nondurable consumer goods reflected a notable increase in the non-energy sector, which includes food, paper, and chemical products for home use. The production of consumer energy products rose again. The output of business equipment, which increased nearly 15 percent at an annual rate in the third quarter, rose 0.8 percent. Continued strength in the production of information processing equipment, which includes computers, along with a rebound in industrial equipment accounted for much of the gain. The output of transit equipment, which has been growing rapidly, on balance, for more than a year, slipped a bit; a decrease in the production of aircraft contributed to the decline. The output of materials rose 0.5 percent as durable materials posted another strong gain. The production of parts for high-technology equipment continues to lead the advance in the output of durable materials. The output of nondurable materials, which posted another small gain in the third quarter, advanced a little further last month. The production of energy materials eased off a bit, as electricity generation was nearly unchanged and the production of crude oil and coal declined.
Industry Groups
Manufacturing output rose 0.6 percent with widespread gains in both the durables and nondurables industries. The growth of output in the durable goods industries, 0.7 percent, was led by increases in industrial machinery and computers, electrical machinery, and instruments. Output changes among the remaining durable goods industries were relatively small. The production of nondurable goods rose 0.5 percent, with gains in most major industries.
The factory operating rate rose 0.2 percentage point, to 83.3 percent, about the same as the August level. The utilization rate for advanced- processing industries increased 0.3 percentage point to 81.6 percent, a level well below the recent high of 84.2 percent, in January 1989. The rate for primary processing edged up 0.1 percentage point to 87.2 percent, but has changed little, on balance, since last March.
Industrial Production
(Seasonally Adjusted)
Percent change Oct 96 to
Aug 97 Sep Oct Oct 97
Total index 0.6 0.5 0.5 5.6
Previous estimates 0.8 0.5 0.7
Major market groups
Products, total 0.8 0.2 0.5 4.8
Consumer goods 0.7 0.2 0.7 3.1
Business equip 2.1 —0.1 0.8 11.2
Const supplies 1.1 —0.1 —0.2 2.6
Materials 0.2 0.9 0.5 6.7
Major industry groups
Manufacturing 0.8 0.2 0.6 5.9
Durable 1.5 0.2 0.7 9.1
Nondurable —0.2 0.3 0.5 2.1
Mining —0.7 —0.7 —1.1 1.4
Utilities —0.5 3.5 0.3 4.4
Capacity Utilization
Capacity
Growth
Percent of Capacity Oct 96 to
Aug 97 Sep Oct Oct 97
Total industry 84.1 84.2 84.3 3.9
Previous estimates 84.1 84.4
Manufacturing 83.2 83.1 83.3 4.3
Advanced processing 81.5 81.3 81.6 5.2
Primary processing 87.1 87.1 87.2 2.3
Mining 92.9 92.2 91.1 1.3
Utilities 88.3 91.3 91.4 1.6
November 17, 1997 Federal Reserve Board
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